Melcor REIT has concluded the go-shop period provided in its previously announced arrangement agreement to go private has completed the sale of Melcor Crossing in Grande Prairie, Alta., for $48 million.

The 90-day go-shop period, which expired on Monday, did not result in any superior proposals, said the REIT. As a result, the no-shop provisions in the agreement are now in effect, restricting Melcor REIT from engaging in alternative acquisition discussions, except under specific fiduciary provisions.

The agreement calls for parent and majority owner Melcor Developments to take the REIT private. Firm Capital and Telsec, two of the REIT’s largest minority investors, have strongly objected to the plan on grounds that it undervalues the REIT and its assets.

Melcor Crossing, a 283,000-square-foot open retail power centre on a 33.3-acre site, was listed for sale in March 2024. The sale generated net cash proceeds of $16.3 million after closing costs, working capital adjustments and mortgage repayment. The REIT intends to use the proceeds to pay down its backstop loan agreement, with the remaining funds allocated to reducing its line of credit.

Grande Prairie is a secondary market located in the Peace Country region. The city flourished prior to the COVID-19 pandemic due to a strong population increase and heightened oil-and-gas industry activities.

As part of the arrangement, Edmonton-based Melcor Developments is slated to acquire its unowned 45% equity interest in Melcor REIT for $5.50 per unit in cash. The proceeds will be used to repurchase and cancel all outstanding participating trust units of the REIT.

The arrangement remains subject to customary closing conditions, including unitholder and court approval, with completion expected in the second quarter of 2025.

A special meeting for unitholders is scheduled for April 11, when Firm Capital and Telsec are expected to continue their efforts to block the deal.

Pictured: Melcor Crossing in Grande Prairie, Alta.

Photo: Courtesy of Avison Young